Alaska editorial: Energy relief a bad idea that could've been a lot worse

Posted: Monday, August 18, 2008

The Legislature finished the final, chaotic week of the special session by spending $946 million on cash handouts and other energy relief measures. It was a lot of money spent on energy Band-Aids and not much on long-term cures - but it could have been a lot worse.

Thanks to the House, the package did not include two expensive new energy subsidy programs. One would have slashed the cost of electricity for urban residents, who already enjoy the lowest rates in the state. The other would have capped heating oil costs for Alaska homes at $3 a gallon. Between the two programs, that was about $450 million of madness avoided.

Most Alaskans will be delighted to get the $1,200-a-person "resource rebate" - payable to every man, woman and child who gets an Alaska Permanent Fund dividend. For many, perhaps most, households, the rebate will more than offset the extra costs they're paying for heat, electricity and gasoline.

If lawmakers had been in a more responsible mood, they could have approved a smaller payment. They could have targeted more of the aid toward households with low incomes or especially high energy prices.

That said, some smaller pieces of the energy relief package were helpful.

Legislators temporarily raised the cap on rural electricity subsidies. Even with the new subsidies, electricity prices in the Bush are high enough to deter wasteful use.

The package expands loans for bulk buying of fuel, which helps small communities that have to pay for a full year's deliveries at one time.

Lawmakers also added money to two pots that were already set aside for home energy conservation programs and future alternative energy projects - but those longer-term investments were only about 11 percent of the total package.

To use a medical analogy, the energy relief measure pours a lot more blood into a wounded body, with only token efforts to stop the cause of the bleeding. Legislators who return after this fall's elections will have plenty of work to do before Alaska has real, long-lasting relief from high energy costs.